University of Nottingham Malaysia
School of Economics

Net Foreign Assets Dynamics: The Persistence and Sources of Shocks to Net Foreign Assets in EU Countries

19th February 2020
For more information, kindly contact Dr Luke Okafor

This paper measures the hysteresis property of the net foreign assets in the EU countries between 1970 and 2011. We first establish that shocks to net foreign asset persist over time. We then measure the size and the source of the permanent effects of the shocks. We find evidence that unanticipated changes in financial integration have a significant permanent effect on net foreign assets across the EU economies, more than output shocks and the dollar exchange rate shocks. This financial shock is particularly persistent to the euro area member countries, that is not the case in non-member EU countries, highlighting the challenges of external adjustment for the currency union.

About the speaker
Kian Ong joined the school in 2019. He received his PhD from the University of Nottingham in 2016 and previously held positions at the University of Nottingham Malaysia as assistant professor and the University of Melbourne as research fellow. 

School of Economics

University of Nottingham Malaysia
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